Security Watch: June 11, 2003

RUSSIA, ISRAEL DISCUSS MIDDLE EAST PEACE PLAN...
Foreign Minister Igor Ivanov and his Israeli counterpart Silvan Shalom met in Moscow on 9 June and discussed the "road map" for Middle East peace, Russian news agencies reported. Shalom, who is paying his first visit to Russia as foreign minister, stressed the key role Russia can play in reaching a settlement of the conflict. "Kommersant-Daily" commented on 9 June that Israel was traditionally against Russia playing a major role in resolving the crisis because of Russia's close ties with the Arab world. However, that changed when the Israeli government endorsed the road map, which Russia helped develop, according to the newspaper. It added that Israel now fears that the UN and the EU are being subjected to strong pro-Arab pressure and is prepared to give Moscow a greater role in the peace process.

...AS WELL AS IRAN'S NUCLEAR PROGRAM.
Ivanov and Shalom also conducted what Ivanov called "very frank and constructive talks" on Iran's nuclear ambitions, ORT reported. Shalom said Israel believes that Iran intends to use its nuclear program to develop nuclear weapons and that such plans pose a threat not only to Israel, but to the entire global community, RIA-Novosti reported. Shalom also claimed that the Iranian regime supports extremist organizations and noted that it does not recognize the state of Israel. "Kommersant-Daily" reported that Shalom sought to express his concerns over Iran to President Vladimir Putin during his two-day trip to Moscow, but Putin declined to meet with him because he is already under intense pressure from the United States on this issue.

PRESIDENTIAL ADVISER SAYS IRAN MUST ALLOW NUCLEAR INSPECTIONS...
Presidential economic adviser Andrei Illarionov told a press conference in Moscow on 3 June that Russia seeks to continue to develop bilateral cooperation with Iran "in a wide range of areas, including peaceful nuclear-energy projects," but first wants to clear up doubts about Tehran's nuclear ambitions, strana.ru and RTR reported. "Just like the other G-8 countries, we would like to be convinced that Iran does not have plans to create nuclear weapons, and only afterward can we talk about broader cooperation," he said. Illarionov added that providing International Atomic Energy Agency (IAEA) inspectors with access to all Iranian nuclear facilities would be the best way to remove all questions and suspicions.

...AS RUSSIAN CONTRACTORS IN IRAN SAY BUSHEHR CONSTRUCTION CONTINUES...
Viktor Kozlov, general director of Atomstroieksport, the main contractor for the construction of Iran's nuclear-power plant in Bushehr, has said that the company has received no instructions from the Atomic Energy Ministry to halt work on the project, polit.ru reported on 4 June. Meanwhile, Aleksei Shavrov, the deputy director of United Machine Building Works, the company responsible for construction of the plant's nuclear reactor, said the Atomic Energy Ministry told him that the work in Bushehr should not be dependent on Iran acceding to the Additional Protocol of the Non-Proliferation Treaty, under which signatories would make their nuclear facilities available for unannounced IAEA inspections (see "RFE/RL Newsline," 2 and 3 June 2003). An unidentified spokesman for the Atomic Energy Ministry told strana.ru on 3 June that his agency has no information confirming Western reports that Iran is developing nuclear weapons, but supports the idea of strengthening IAEA control over Iran's nuclear program.

...AND FOREIGN MINISTRY SAYS RUSSIA WILL GO AHEAD WITH NUCLEAR FUEL FOR IRAN.
Russian Foreign Ministry spokesman Aleksandr Yakovenko said in Moscow on 5 June that Russia will "supply nuclear fuel for Iran's Bushehr nuclear-power plant even if Iran does not sign an additional protocol on guarantees with the IAEA," ITAR-TASS reported. However, he said Russia would begin supplying the fuel only after the two sides sign an agreement on returning the spent fuel to Russia.

RUSSIAN PARLIAMENTARIAN SAYS IRANIAN NUCLEAR THREAT IS REAL.
Duma CIS Affairs Committee Chairman and former Deputy Defense Minister Andrei Kokoshin said on 3 June that the danger of Iran creating a nuclear weapon is "not invented, but a real threat," rusenergy.ru reported. He said there is a lot of evidence that Iran has reached a dangerous level in the development of its nuclear program. In addition, he said Iran is designing a missile with "quite a long range" and there is a risk it will be in violation of the Non-Proliferation Treaty. Such a development would be a "real headache" for the entire international community, he said, but first all for Russia, which the West could blame for the situation. Thus, it is in Russia's national interest to support international efforts to prevent such a scenario from developing.

PUTIN TOUTS U.S.-RUSSIA RELATIONS...
Speaking at a press briefing after the Group of Eight (G-8) summit in Evian, France, President Putin said on 3 June there is no alternative to U.S.-Russian cooperation, RTR and ORT reported. "The U.S. is Russia's major partner, and in some areas the United States' role is absolutely unique for Russia," Interfax quoted Putin as saying. "We are talking about issues relating to the strengthening of international security and strategic stability." He added, "In some areas, such as the fight against terrorism, the U.S. is a consistent and reliable partner for Russia." Putin also said he does not agree with the opinion that the United States has isolated itself from the global community as a result of differences over Iraq.

...AND DISCUSSES FALLOUT FROM IRAQ CRISIS.
At the same 3 June press briefing, Putin said that "the situation with Iraq was largely connected to the fact that the Americans felt they were threatened, felt that their national pride was hurt, and felt the need to assert themselves," Interfax reported. "This was one of the motives for their actions." However, he added that "I don't think this was done correctly" and vowed that Russia will continue to "defend our positions on issues that affect our country's national interests," while at the same time working to develop international cooperation. In recalling Russia's tough stance on the Iraq issue, Putin said it could have caused U.S. President George W. Bush "to take offense, not to come to St. Petersburg, and head for further confrontation in the relations between Moscow and Washington." However, Putin said, "Bush acted like a serious politician who wants to develop relations with Russia and the whole world." He said it would be a mistake to "reject a hand outstretched in friendship" and said Russia would not contribute to a split in the global community by joining any anti-U.S. coalitions.

FOREIGN MINISTER SAYS RUSSIAN CONTRACTS IN IRAQ WILL BE HONORED.
Foreign Minister Ivanov on 9 June told a meeting in Moscow of 60 managers of 40 Russian companies that prior to the passage of UN Resolution 1483 in May, Russia received assurances from the United States that the country's business interests in Iraq would be protected, strana.ru reported. Ivanov said Russia is currently "conducting an active dialogue with all parties to the process and hopes for the participation of Russian companies in the postwar reconstruction in Iraq." Russia has "ensured that none of the financed Russian contracts [in Iraq] will be annulled," Ivanov said. "At worst, some of them will be frozen pending discussion with the internationally recognized government of Iraq after its creation." He noted that the United States agreed to incorporate into UN Resolution 1483 a provision welcoming the Paris Club of creditor countries to help resolve the issue of Iraqi debts.

FOREIGN MINISTER WARNS OF NEW EUROPEAN DIVIDES.
Igor Ivanov said on 11 June that Russia, EU member states, and EU candidate countries share an interest in preventing the disruption of traditional contacts between Russia and countries that join the EU, ITAR-TASS reported. Speaking at a ministerial session of the Council of Baltic Sea States in Pori, Ivanov said Russia, along with current and future EU states, must reject the creation of new dividing lines in Europe. "If we fail to disentangle a knot of serious problems until [the expected accession of EU candidate states on] 1 May 2004, all sides will suffer a loss," Ivanov reportedly said.

RUSSIA HEDGES ON RATIFICATION OF KYOTO PROTOCOL.
Speaking at a press conference in Moscow on 3 June, presidential economic adviser Illarionov said Russia is in no hurry to ratify the Kyoto protocol, which has been signed by most industrial and developing countries and would impose limits on smokestack emissions and other causes of global warming, Russian news agencies reported. In general, Russia supports international efforts to prevent global warming, he said, but the protocol's benefits for Russia are illusory, RosBalt reported. In addition, Illarionov said the concept of global warming is controversial and that it is questionable whether human activity contributes to the problem. Illarionov also said there has been no serious analysis of the Kyoto protocol, and noted that the United States retreated from the protocol because the expenses associated with its implementation could be higher than the benefits it would bring. "I am not sure Russia can bear expenses that the richest country in the world cannot afford," Illarionov said.

WAR IN CHECHNYA

AMNESTY FOR CHECHEN FIGHTERS TAKES EFFECT.
The State Duma passed the bill on an amnesty for participants in the last 10 years of fighting in Chechnya in the third and final reading on 6 June by a vote of 352-25, with one abstention, Interfax reported. The law took effect from the time of its publication in the 7 June issue of "Rossiiskaya gazeta." Russian presidential human rights commission head Ella Pamfilova said on 6 June that up to 1,000 Chechen fighters could be eligible for amnesty; Russian presidential aide Sergei Yastrzhembskii said some 200 Chechens currently serving prison terms could be eligible, together with a similar number of Russian servicemen, Interfax reported. Russian presidential commissioner for human rights in Chechnya Abdul-Khakim Sultygov said on 6 June it is important to ensure that Chechen fighters who surrender their arms under the amnesty do not become blood-feud victims, Interfax reported. "Profil" on 26 May quoted Aslanbek Aslakhanov, Chechnya's deputy to the Duma, as saying that most of the 500 Chechens who surrendered during the 1999 amnesty were subsequently either murdered by fellow Chechens or disappeared during "mop-up" operations conducted by Russian troops.

MOSCOW INCREASES TROOP PRESENCE IN CHECHNYA.
Despite the amnesty for Chechen prisoners that was passed by the State Duma on 6 June (see "RFE/RL Newsline " 9 June 2003), the Kremlin is increasing the number of Russian troops in the republic, RTR reported on 9 June. The Defense Ministry has announced that this week it will dispatch an additional 1,000 paratroopers to Chechnya. The paratroopers will join soldiers from the Airborne Forces, army, Interior Ministry, Border Troops, Federal Security Service (FSB), and Main Intelligence Directorate of the General Staff (GRU) who are already stationed in Chechnya. RTR commented that the fresh deployment is a reaction on the part of the Defense Ministry to the increased activity of Chechen fighters, and shows that the ministry does not place much faith in the effectiveness of the amnesty.

THIRTY CHECHEN FIGHTERS TAKE ADVANTAGE OF AMNESTY.
By the evening of 9 June, over 30 Chechen fighters, most of them from Achkhoi-Martan Raion, had laid down their weapons to qualify for the amnesty that went into effect two days earlier, Chechen Security Council Secretary Rudnik Dudaev told Interfax on 9 June. Dudaev predicted that the number of gunmen who surrender will grow from day to day. Chechen Deputy Prime Minister Movsar Khamidov, who supervises the law-enforcement sector, estimated the number of Chechen fighters eligible for amnesty at 1,500, Interfax reported.

MILITARY

NEW BANNER FOR MILITARY TAKEN UP.
The State Duma approved on 4 June a presidential bill amending the law on the banners of the armed forces, navy, and other military services, Russian media reported. The vote was 271 in favor with 105 against and two abstentions, ITAR-TASS reported. If passed into law, the bill would change the design of the banner of the armed forces "in accordance with the historical traditions of banner design as official symbols and military relics," according to Georgii Vilinbakhov, chairman of the presidential Heraldic Council. The insignia of the armed forces will feature five-point stars and the words "fatherland, duty, and honor" -- words that appeared on Russian army banners starting in the 18th century, "Kommersant-Daily" reported on 5 June. The flag will also feature a large golden double-headed eagle. The Communist faction voted against the bill, and according to polit.ru, tried to get an answer from Vilinbakhov as to why the new legislation was necessary when a law on state symbols was passed just two years ago.

CRIME AND PUNISHMENT

TWO TOP DEFENSE INDUSTRY EXECUTIVES GUNNED DOWN...
Igor Klimov, the acting general director of the defense-industry consortium Almaz-Antei, and Sergei Shchitko, the commercial director of the RATEP defense plant, an Almaz-Antei subsidiary, were shot dead on 6 June in separate incidents, Russian news agencies reported. Klimov was killed near his home in central Moscow in the morning of 6 June by an unidentified man bearing a silencer-equipped pistol. He was a former officer of the Foreign Intelligence Service (SVR) and formerly served in President Putin's administration. The 42-year-old Klimov was appointed acting head of Almaz-Antei in February following a power struggle within the consortium, which was scheduled to hold a shareholders meeting on 26 June to appoint a permanent general director. Klimov was expected to be named to the post. Almaz-Antei was formed last year by presidential decree and manufactures some of Russia's most advanced air-defense systems, such as the S-400 and the S-300 antiaircraft and antimissile systems, accounting for export contracts worth $5 billion-$7 billion. Unidentified investigators believe some members of Almaz-Antei's old guard might have feared that Klimov would gain access to the consortium's cash flow upon his expected appointment as permanent general director, according to strana.ru.

...IN WHAT INVESTIGATORS BELIEVE ARE RELATED KILLINGS.
RATEP Commercial Director Shchitko was found dead on 7 June in his vehicle in Serpukhov, a small city near about 90 kilometers south of Moscow, strana.ru reported. Investigators believe he was shot in the head multiple times late 6 June or early 7 June by a lone gunman with a pistol equipped with a silencer. They speculate that Shchitko's death is related to his "professional activities" and to Klimov's killing. RATEP manufactures electronics for the defense industry and for commercial use. Strana.ru on 8 June commented that Klimov's killing is a serious blow to the Kremlin's plans to create a fifth-generation air-defense system. Almaz-Antei's management includes several battling military-industrial groups and Klimov's task was to harmonize them, strana.ru added. Klimov was considered a protege of General Viktor Ivanov, a deputy presidential administration head and veteran of the Soviet and Russian state-security services, who is currently the chairman of Almaz-Antei's board.

DUMA PASSES FIRST READINGS OF WITNESS-PROTECTION BILL.
The State Duma on 6 June endorsed in its first reading a presidential bill on witness protection, polit.ru reported. The bill, which was initiated by President Putin, passed by a vote of 353 in favor to one against. The bill calls for the establishment of a state-sponsored program for the long-term protection of witnesses who testify in high-profile criminal proceedings. The bill allows for changing witnesses' and their family's places of residence, work, or study, and altering their identities and appearance. Approximately 735 million rubles would be allocated from the federal budget to support the program.

POLITICAL ECONOMY

PRIME MINISTER PRESENTS DRAFT BUDGET...
Prime Minister Mikhail Kasyanov presented a draft 2004 budget to the cabinet on 5 June, predicting 5 percent growth for the year and inflation of 10 percent, RIA-Novosti and strana.ru reported. He said the government plans to stimulate the economy and increase budget revenues through significant tax reductions and measures to curb inflation. Finance Minister Aleksei Kudrin said budget priorities will include increased defense expenditures to finance reforms, a strong commitment to law enforcement, and fulfilling social-security obligations. He conceded that the growth-rate assumption in the draft budget, just 0.5 percentage points above predictions for 2003, are insufficient in light of President Putin's recent pledge to double the size of the Russian economy in the next decade (see "RFE/RL Newsline," 16 May 2003). But Kudrin added that growth might increase as the effects of economic reform kick in over the following years.

...THAT SUGGESTS A LACK OF COORDINATION IN ECONOMIC POLICY.
Strana.ru on 5 June noted a seeming lack of coordination in economic policy between the government and the presidential administration, citing the disparity between Putin's mid-May pledge and Kasyanov's budget assumptions. The website claimed the economy needs to show 7.2 percent expansion to grow in line with the president's statements, not the 5 percent that Kasyanov predicted for 2004. Strana.ru also said the government and the Kremlin appear to differ on the appropriate tools for stimulating the economy, with Kasyanov speaking of tax cuts and combating inflation while presidential adviser Andrei Illarionov has proposed the creation of a stabilization fund and continued reforms of the tax system.

FINANCE MINISTRY URGES INHERITANCE-TAX CUTS...
Deputy Finance Minister Sergei Shatalov on 2 June proposed radically reducing or eliminating inheritance taxes on many assets on the grounds that Russians are evading such taxes, "Izvestiya" and RTR reported the next day. The government would like to eliminate the 30 percent tax rate on inheritance, he said, and replace it with a 13 percent rate for distant relatives and a 5 percent rate for immediate family members. To offset the effect on state revenues, Shatalov said the government plan would include assessments for tax purposes on the basis of market value rather than the value reported by recipients, as is currently the case. The minister proposed eliminating the inheritance tax on securities such as stocks and bonds, cash, jewelry, and luxury goods.

...AND EASING FINANCIAL MONITORING.
Shatalov also effectively conceded defeat to deputies on 2 June in one area of the government's effort to combat financial crime, urging Duma support for a government proposal to abandon the monitoring of transactions over $30,000. He said the government's monitoring of such transactions -- in many cases concerning home purchases and the acquisition of gold -- has proven inefficient. Oksana Dmitrieva, deputy chairwoman of the Duma's Budget Committee, immediately rejected the proposal to narrow the scope of the inheritance tax as a "conception from the Soviet era," "Izvestiya" reported. In initially considering the scheme, Budget Committee members recommended that securities be returned to the list of taxable items, since exempting them might create a situation in which an individual could profit from the expedient death of a relative who possesses sizable assets in the form of securities.

TRENDS AND IDEAS

PUTIN CONGRATULATES PATRIARCH OF RUSSIAN NATIONALISM...
President Putin sent a letter of congratulations to mathematician Igor Shafarevich on the occasion of his 80th birthday on 3 June, ORT reported on 2 June. In the letter, Putin reportedly praised Shafarevich as an "outstanding mathematician who created a scientific school known not only at home, but abroad." Shafarevich is highly regarded by the world's scientific community, but is controversial for authoring several anti-Semitic books, according to gazeta.ru on 3 June. His work "Russophobia" (1989) is highly valued by the xenophobic movement Pamyat and other nationalist groups. Many anti-Semites in modern Russia consider Shafarevich their idol and teacher, gazeta.ru commented.

...AND PRAYS BEFORE RELICS OF RUSSIA'S PATRON SAINT.
Putin met in the Cathedral of Christ the Savior in Moscow with Russian Orthodox Church leaders and the presidential envoy in the Central Federal District on 9 June, praying before the relics of Saint Andrew the First Called, whose remains were delivered to Moscow the same day, Russian news agencies reported. Saint Andrew, whose relics were transported from an Orthodox monastery in Greece to Russia for St. Petersburg's 300th anniversary, is the Russian Orthodox Church's patron saint of Russia. Saint Andrew's relics will tour the Russian Republic, including stops in Vladivostok, Murmansk, Baltiisk, and Sevastopol, where Russian naval forces are headquartered.

MOSCOW GOVERNMENT TO RESTORE SYMBOL OF 'SOCIALIST REALISM.'
The Moscow government has decided to restore the city's famous "The Worker and Kolkhoz Woman" monument, RTR reported on 3 June. The 24-meter stainless-steel statue was created by Vera Mukhina in 1936 and was exhibited at the Soviet Pavilion at the Paris World Fair in 1937. It was considered the premier symbol of Soviet art and exemplified the so-called socialist-realism style. According to the plan, the huge monument will be dismantled from its present location and following renovation will be assembled atop a commercial building constructed as an exact replica of the 1937 World Fair pavilion. The renovation of the monument would be the first of a socialist symbol since the fall of the Soviet Union, according to RTR.